Investor enthusiasm for artificial intelligence (AI) stocks remains strong as we enter 2026, despite growing concerns about the high valuations.
In fact, according to The Motley Fool's 2026 AI Investor Outlook Report, 62% of surveyed respondents expect companies that invest heavily in AI initiatives to deliver strong long-term returns. Around 9 out of every 10 existing AI investors also plan to maintain or even increase their exposure to AI stocks.
Image source: Getty Images.
Against this backdrop of continued investor confidence, Nvidia (NVDA 1.24%) and Meta Platforms (META 2.41%) are two core AI stocks to watch in 2026.
1. Nvidia
Nvidia continues to benefit from a multiyear shift, as data centers move away from CPU-based workloads to GPU-driven accelerated computing. The company estimates that data center infrastructure spending will be between $3 trillion and $4 trillion by the end of the decade, with roughly half tied to accelerated computing.
The opportunity for accelerated computing extends beyond generative AI and agentic AI to traditional enterprise workloads such as search, recommendation systems, and social media platforms.
NASDAQ: NVDA
Key Data Points
The majority of the company's current GPU shipments are for new buildouts in the U.S. and international markets. Hence, replacing the existing installed base may also prove to be a massive opportunity for Nvidia in the coming years.
Finally, Nvidia is also benefiting from the flywheel effect, wherein reasoning-heavy AI models drive higher usage of tokens, translating into improved user engagement and ultimately monetizable inference workloads. This, in turn, drives demand for additional compute capacity, further increasing investments in GPUs.
Considering these tailwinds, Nvidia seems an attractive pick, mainly as it trades at a reasonable 24.7 times forward earnings.
2. Meta Platforms
Meta Platforms is also benefiting from an increasing monetization of AI technologies across its digital advertising ecosystem. The company has reaccelerated its revenue growth by 26% year over year in the third quarter (ending Sept. 30, 2025), supported by improved ad pricing and higher user engagement across its family of apps.
The company has been leveraging its AI-driven content recommendation systems and Advantage+ advertising tools, which are improving ad targeting, conversion rates, and measurement capabilities. These improvements, coupled with Meta's unmatched scale of over 3.5 billion daily active users, are translating into higher returns on investment for advertisers and stronger pricing power for the company.
NASDAQ: META
Key Data Points
Meta is also investing aggressively in expanding data center capacity and in developing advanced models. The company expects its fiscal 2025 capital expenses to be in the range of $70 billion to $72 billion, with a major portion being AI-related spending.
Meta is rapidly advancing its agentic AI capabilities by agreeing to acquire Singapore-based AI start-up Manus, which is well-known for its general-purpose AI agent, for over $2 billion. In December 2025, Manus highlighted $100 million in annual recurring revenue and over $125 million in total revenue run rate, which includes usage-based fees as well as other income streams. This highlights early commercial traction for Manus.
Hence, at 22 times forward earnings, the company's valuation reflects confidence in an AI-driven growth trajectory, positioning it as a smart AI pick for 2026.
